Belvedere Palace Vienna, Austria

James Bellington on the “Austrians vs. Bitcoin” Debate

James Bellington September 19, 2012 at 12:35 am
The attitude of the Austrians is very odd behaviour indeed, and as Bitcoin grows, the excuses they don’t give will make it harder for them to explain why they did not get start accepting it sooner.

Will they say that Bitcoin was not big enough to justify accepting it? And when they do end up accepting it, will they claim that they did not think that it was money, but now they do? Will they say that they were waiting for other people to accept it before they did, relegating them to the level of a herd of followers of the ignorant masses? What possible excuse can they have for rejecting Bitcoin? One thing is for certain, in the end, they will be using and accepting Bitcoin and they will have nothing to fall back on as an excuse for not doing so sooner rather than later. This is important, because they are asking people to change their minds about deeply held beliefs about money the law, rights and ethics and how the world could work as a free society. If they are not willing to accept Bitcoin to help make this change come about, in the most crucial area of life that keeps the empires running, money, it means there is a serious disconnect and flaw in their thinking. The question is where is that flaw, and what is its character.

Many in the Austrian camp have bravely and to great effect, embraced the power of superdistribution in the giveaway model. Almost every book sold in their online stores is available as a free download in many different formats. For certain, this has accelerated the spread of their correct ideas, and caused the sales of their paper books to increase. Not accepting Bitcoin is the equivalent of refusing to allow people to download PDFs without charge and using restrictive copyright clauses to try and prevent readers from spreading the books and ideas. It is pure Luddite in its character, and very out of character for a group of people whose focus and purpose is creating a future where liberty is spread all over the globe.

A few of these Libertarian Bitcoin refusers will claim that Bitcoin is not money, therefore they cannot accept it in exchange for goods. They will refer to the Mises regression theorem to assert that Bitcoin is not money. This is a position that I understand completely because strictly speaking, Bitcoin is not backed by anything.

The other reason why they may not accept Bitcoin is that they are all computer illiterates. This is possible, though unlikely. Remember, these are the same people who have embraced download for free and copy as you like superdistribution of the books they are selling; a revolutionary, counter intuitive manoeuvre that to most book publishers is anathema. In this respect, once again, they are very forward thinking, out of the box, and ahead of the curve. And it has worked spectacularly.

Perhaps what we are seeing here is a classic case of The Emperors New Clothes. All of these people are subjects in the same Austrian Empire, and none of them wants to be the first to stick his head out and take the risk of accepting Bitcoin. In a small community with decades of reputation and good will built up, accepting Bitcoin, in the unlikely event that it fails spectacularly, may tarnish their reputation forever. Bitcoin is risky, for ‘apostates’ and is not part of the mainstream yet. On the other hand, being able to accept Credit Cards is a mark of respectability and stamp of approval; it gives buyers a sense that the people selling these ideas are acceptable, not a threat, or group of anarchists. Even though they are. Bitcoin is still of the underground, it’s an unknown quantity. When you are trying to convince someone to throw away decades of statist brainwashing, any barrier to entry is a bad thing, and perhaps, the thinking is that Bitcoin would put people off. Of course, this doesn’t work at all, because Bitcoin can be used side by side with Credit Card payments and PayPal. This is not an either or proposition, it’s a pure win enhancement for everyone.

Really there is no excuse for not accepting Bitcoin. As I say above, Bitcoin sales cannot cannibalise PayPal and Credit Card sales, it can only add to your bottom line.

I fear this can only be a philosophical, psychological objection to Bitcoin, and given the brush off the owner of this blog received in an email exchange with the owner of one of these sites, it’s clear that the Emperors New Clothes effect is what is causing a point blank, fingers in ears refusal to integrate Bitcoin payments into their carts.

Despite all of this, I am not at all concerned that the Austrians are rejecting Bitcoin.

There is not a single movement started by man that has not fallen to dust. The people who make up the Austrian School will eventually all die, and their useful ideas will be picked up and adapted by the people of the coming centuries, the bad ideas discarded.

No one in the future will have any problem being a Libertarian and using Bitcoin; it will be as natural as drinking water. Historians will look back at the first two years of Bitcoin and wonder how it was that rational, highly intelligent, educated people who were deeply integrated into the web and understood its potential to spread ideas could have missed this crystal clear example of a game changing revolution, in the very field of their expertise: money. That many of them were historians will make the puzzle even more perplexing. No doubt, a book will be written on this subject, with a title along the lines of, “The Bitcoin Luddites: How the Austrian School Failed to Spot the Monetary Revolution”.

Either way, Bitcoin does not need Austrians to spread all over the world. The internet and its global spread did not need the advocates of the Austrian School to promote it, and it has changed everything and is everywhere, and the same thing will happen with Bitcoin. We do not need the Austrian school to achieve a breakthrough in the adoption of Bitcoin. It is already inevitable.

The problem for the reputation of the Austrians is that the internet is not concerned with money especially, and so it is excusable for them to not have predicted it or been boosters of it from its infancy. Bitcoin is a different matter however. Bitcoin is only about money and Liberty, and it is very much concerned with the matters that Austrians specialise in and have correct. That they have actively rejected it, with irrational hostility does not auger well for their reputation as forward thinkers and shapers of the future.


James Bellington was a commenter that left many pieces of analysis like the one above on the topic of Bitcoin, and the dismissive and very odd response to it from certain men in the Austrian School camp.

The curious can use Google to find some of them, but it’s a safe bet that many of them are lost forever, as comments on websites are the fragile edges that deteriorate first on the ephemeral internet.

As Bitcoin reaches sustainable record high prices, every argument made against it by its many detractors has been utterly demolished. Bitcoin is going to do everything its designer meant it to do, and the world will greatly benefit from it, in ways we can only just imagine, and which the Statists will not like at all.


James Bellington is a nice chap.
Send him Bitcoin, and I’ll make sure he gets it.

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